Analysis: Investors could warm again to palladium

According to this article on palladium, investors could warm again to the precious metal:

Lured by a relatively low price and cheaper investment costs, investors could warm again to palladium, which was left in the cold after market restrictions and price volatility in the early 2000s.

Palladium rose in March to its highest level since 2001, renewing investor confidence in the precious metal, and analysts said a bullish outlook for its sister metal, platinum, could help spark another rally.

Cash-rich investment funds could see palladium, used in car exhausts, jewellery and dental equipment, as an alternative to gold or platinum, as both metals had hit lifetime highs.

"I see potential in palladium,'' said Akira Doi, a director at Daiichi Commodities. ''It is still far behind the value of platinum and gold."As long as platinum is strong, palladium will be supported. Considering that it is well below its record highs, palladium could jump with fresh fundamentals," he added.

The precious metal fixed at $446 (R3 401) an ounce yesterday afternoon in London, up more than 20 percent from the beginning of the year, after rising 10 percent in value last year.

Palladium's surge had been given a boost and would continue to be well supported by platinum's strength, traders said. Platinum hit record highs this year after a power crisis stopped mining in South Africa, the world's biggest producer, raising fears of a widening supply deficit and sparking speculative buying.